MaxLinear, Inc. Announces First Quarter 2019 Financial Results

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(1) Long-term lease liabilities have been reclassified from other long-term liabilities to conform to current period presentation.


MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(in thousands, except per share data)

	Three Months Ended
	March 31,			December 31,			March 31,
	2019			2018			2018
GAAP gross profit	$	45,077		$	45,900		$	62,668
Stock-based compensation	130			132			106
Performance based equity	73			56			78
Amortization of purchased intangible assets	8,424			8,875			8,969
Depreciation of fixed asset step-up	—			—			112
Non-GAAP gross profit	53,704			54,963			71,933

GAAP R&D expenses	27,399			29,667			31,121
Stock-based compensation	(4,213		)	(4,399		)	(4,374		)
Performance based equity	(925		)	(1,254		)	(1,140		)
Depreciation of fixed asset step-up	(6		)	(76		)	(329		)
Non-GAAP R&D expenses	22,255			23,938			25,278

GAAP SG&A expenses	23,591			25,208			27,117
Stock-based compensation	(3,404		)	(3,481		)	(3,993		)
Performance based equity	(939		)	(948		)	(1,049		)
Amortization of purchased intangible assets	(5,798		)	(7,994		)	(7,994		)
Depreciation of fixed asset step-up	—			(2		)	(10		)
IP litigation costs, net	—			(3		)	(42		)
Non-GAAP SG&A expenses	13,450			12,780			14,029

GAAP restructuring expenses	1,917			1,737			—
Restructuring charges	(1,917		)	(1,737		)	—
Non-GAAP restructuring expenses	—			—			—

GAAP income (loss) from operations	(7,830		)	(10,712		)	4,430
Total non-GAAP adjustments	25,829			28,957			28,196
Non-GAAP income from operations	17,999			18,245			32,626

GAAP and non-GAAP interest and other income (expense), net	(3,483		)	(2,941		)	(4,447		)

GAAP loss before income taxes	(11,313		)	(13,653		)	(17		)
Total non-GAAP adjustments	25,829			28,957			28,196
Non-GAAP income before income taxes	14,516			15,304			28,179

GAAP income tax benefit	(6,462		)	(13,964		)	(1,864		)
Adjustment for non-cash tax benefits/expenses and effects of the Tax Act	7,478			15,035			3,837
Non-GAAP income tax provision	1,016			1,071			1,973

GAAP net income (loss)	(4,851		)	311			1,847
Total non-GAAP adjustments before income taxes	25,829			28,957			28,196
Less: total tax adjustments	7,478			15,035			3,837
Non-GAAP net income	$	13,500		$	14,233		$	26,206

Shares used in computing non-GAAP basic net income per share	69,968			69,186			67,674
Shares used in computing non-GAAP diluted net income per share	71,900			71,267			70,440
Non-GAAP basic net income per share	$	0.19		$	0.21		$	0.39
Non-GAAP diluted net income per share	$	0.19		$	0.20		$	0.37


MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

	Three Months Ended
	March 31,		December 31,		March 31,
	2019		2018		2018
GAAP gross profit	53.3	%	52.4	%	56.5	%
Stock-based compensation	0.2	%	0.2	%	0.1	%
Performance based equity	0.1	%	0.1	%	0.1	%
Amortization of purchased intangible assets	10.0	%	10.1	%	8.1	%
Depreciation of fixed asset step-up	—	%	—	%	0.1	%
Non-GAAP gross profit	63.5	%	62.7	%	64.9	%

GAAP R&D expenses	32.4	%	33.9	%	28.1	%
Stock-based compensation	(5.0	)%	(5.0	)%	(3.9	)%
Performance based equity	(1.1	)%	(1.4	)%	(1.0	)%
Depreciation of fixed asset step-up	—	%	(0.1	)%	(0.4	)%
Non-GAAP R&D expenses	26.3	%	27.3	%	22.8	%

GAAP SG&A expenses	27.9	%	28.8	%	24.5	%
Stock-based compensation	(4.0	)%	(4.0	)%	(3.6	)%
Performance based equity	(1.1	)%	(1.1	)%	(0.9	)%
Amortization of purchased intangible assets	(6.9	)%	(9.1	)%	(7.2	)%
Depreciation of fixed asset step-up	—	%	—	%	(0.1	)%
IP litigation costs, net	—	%	—	%	—	%
Non-GAAP SG&A expenses	15.9	%	14.6	%	12.7	%

GAAP restructuring expenses	2.3	%	2.0	%	—	%
Restructuring charges	(2.3	)%	(2.0	)%	—	%
Non-GAAP restructuring expenses	—	%	—	%	—	%

GAAP income (loss) from operations	(9.3	)%	(12.2	)%	4.0	%
Total non-GAAP adjustments	30.5	%	33.0	%	25.4	%
Non-GAAP income from operations	21.3	%	20.8	%	29.4	%

GAAP and non-GAAP interest and other income (expense), net	(4.1	)%	(3.4	)%	(4.0	)%

GAAP loss before income taxes	(13.4	)%	(15.6	)%	—	%
Total non-GAAP adjustments before income taxes	30.5	%	33.0	%	25.4	%
Non-GAAP income before income taxes	17.2	%	17.5	%	25.4	%

GAAP income tax benefit	(7.6	)%	(15.9	)%	(1.7	)%
Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act	8.8	%	17.2	%	3.5	%
Non-GAAP income tax provision	1.2	%	1.2	%	1.8	%

GAAP net income (loss)	(5.7	)%	0.4	%	1.7	%
Total non-GAAP adjustments before income taxes	30.5	%	33.0	%	25.4	%
Less: total tax adjustments	8.8	%	17.2	%	3.5	%
Non-GAAP net income	16.0	%	16.2	%	23.6	%

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